Abstract
The study aims to identify the impact of value-added tax (VAT) on Saudi banks, through measuring the impact of changes in the banks before and after the implementation of Value Added Tax (VAT), in all of total assets, total liabilities, customer deposits, retained earnings, total operating income, total operating expenses and net operating income. The study targeted the fourth quarter of 2017 (before the implementation of VAT), and the first and second quarters of 2018 (after the implementation of VAT). The study found that there is a slight decline in total assets, total liabilities, customer deposits and current accounts, in addition to a significant decline in retained earnings, total operating expenses after the implementation of VAT. On the other hand, the study found that there is a slight increase in the total income of operations and a significant increase in net operating income after the implementation of value-added tax. Moreover, the study found that there are no statistically significant differences between total assets, total liabilities, customer deposits, current accounts, total operating income, total operating expenses, net operating income before and after the implementation of value-added tax; while there are statistically significant differences between retained profits before and after VAT. Key words: Commercial banks, value-added tax (VAT).
Highlights
Value Added Tax (VAT) is an indirect tax that first appeared in 1954 in France
The study focused on examining the following question: Has Value Added Tax (VAT) implementation affected total assets, total liabilities, customer deposits, retained earnings, the total operating income, the total operating expenses, net operating income? The study aims to identify the impact of Value-added tax (VAT) On Saudi banks, through measuring the impact of changes in the banks before and after the implementation of Value Added Tax (VAT), in all of total assets, total liabilities, customer deposits, retained earnings, total operating income, total operating expenses, net operating income
The study is based on the practical aspects of the commercial banks’ financial statements in the Kingdom of Saudi Arabia, which are all 12 listed on the Saudi Stock Exchange, by identifying the following data that exist in financial position in addition to the data in the statement of income
Summary
VAT is an indirect tax that first appeared in 1954 in France. Maurice Loretta is the one who proposed its concept and puts its main rules. There are many differences in the structure of VAT and the way of its implementation, but there is an international agreement on some of the main issues, such as making consumption the final base of this tax. It is characterized by a desirable feature which is the tax does exceed the productive potential limits of economy. The percentage of value added tax in the Kingdom of Saudi Arabia along with its partners (GCC countries) is 5%, which is the lowest percentage of value added tax in the world; whereas the rate of VAT in Australia is10%, in Egypt is 13%, in Turkey is 18%, while in Germany it is 19%, in Morocco, UK, France is 20%, and Italy is 22%2. The study focused on examining the following question: Has Value Added Tax (VAT) implementation affected total assets, total liabilities, customer deposits (current accounts), retained earnings, the total operating income, the total operating expenses, net operating income? The study aims to identify the impact of Value-added tax (VAT) On Saudi banks, through measuring the impact of changes in the banks before and after the implementation of Value Added Tax (VAT), in all of total assets, total liabilities, customer deposits, retained earnings, total operating income, total operating expenses, net operating income
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